3 BIR Notices for Audit Jurisdiction

BIR plays a vital role in the growth and progress of our country. People allow a part of their compensation to be able to contribute to the expenses of the government. However, there will be instances when some would receive BIR notices for assessment and audit. This may be alarming, especially for first-timers. In case this happens, one must be knowledgeable of what a BIR Audit is. To help you, here are 3 notices for you to remember:

1. Letter of Authority
Letter of Authority (LA) is an official document that gives authority for a BIR personnel to examine a Taxpayer’s book of accounts. The LA notifies the taxpayer that this certain BIR officer has been authorized to examine and validate his books and records to know his correct tax liabilities.

For taxpayers under the jurisdiction of National Office, LA is issued and approved by the Commissioner of Internal Revenue. For taxpayers under the jurisdiction of Regional Offices, LA is issued by the Regional Director. LA becomes null and void when not served to the concerned taxpayer within thirty (30) days from its date of issuance. With this said, the taxpayer has the right to refuse it.

Letters of Authority are usually sent to taxpayers who earn P10 million per annum.

2. Tax Verification Notice (TVN)

TVN works the same way as LA does. TVN is also an official document authorizing a BIR personnel to investigate on a taxpayer’s books and records.

BIR determines to whom a TVN or LA would be sent based on taxpayers’ professions or industries. TVNs are commonly sent to those who earn below P10 million per annum.

3. Letter Notice

Letter Notice (LN) is a document which informs a taxpayer of a suspected under-declaration of sales and/or over-declaration of purchases. It means that there are discrepancies seen for a particular taxable period. The LN provides a basis on this discrepancy. If LN wouldn’t be resolved in its initial phase, then it may ripen into an LA.

If you want to learn more about BIR Audit, join Mr. Ruperto Somera, former Director of Bureau of Internal Revenue, as he talks about “Top Secrets of Handling BIR Audit”. This event is set to happen on September 29, 2017, at the RCBC Plaza Makati.